Onanuga was reacting to the backlash that greeted the Federal Government’s announcement of a 30-day fuel discount.
By Kehinde Okeowo
Bayo Onanuga, the Special Adviser to President Bola Tinubu on Information and Strategy, has reiterated an earlier claim by the Minister of Finance, Taiwo Oyedele, that the fuel discount isn’t the same thing as a subsidy.
He made the clarification on Friday in a post shared on his official X (formerly Twitter) page, titled: “Margin Discount and a Subsidy Are Not the Same”.
Onanuga was reacting to the backlash that followed the Federal Government’s announcement of a 30-day fuel discount at Nigerian National Petroleum Company Limited (NNPCL) outlets nationwide.
Explaining the difference between the two policies, the presidential aide noted that a margin discount occurs when a fuel retailer reduces or temporarily waives its profit margin to pass the savings on to consumers.
While differentiating a discount from a subsidy, he defined the latter as “when the government pays part of the price the consumer would otherwise pay”.
Taking to his verified handle, Onanuga wrote: “The ADC and NDC should carefully re-read this ministerial brief: Margin Discount and a Subsidy Are Not the Same.
“Every marketer adds a margin to the price it pays for the fuel it sells. A margin discount means the retailer chooses to take a smaller margin, or no margin at all, for a period, and passes the savings on to the customer. The cost of the discount is borne by the retailer alone.
“A subsidy is different. It is when the government pays part of the price the consumer would otherwise pay.
“That money comes from public revenue funds that would otherwise go to salaries, schools, hospitals, and infrastructure. That is the regime this administration ended in 2023, and it is not coming back.”
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However, former presidential aide and Arise Television’s Morning Show anchor, Reuben Abati, has criticised the Federal Government’s 30-day petrol discount, saying the administration acted too late to provide relief to Nigerians.
Abati said the temporary nature of the intervention raised questions about what would happen after the 30-day period.
He also questioned the government’s continued borrowing despite its decision to remove the petrol subsidy, which was partly justified as a measure to increase revenue and curb corruption.
Speaking on Friday on his show, Abati queried: “The other issue is that it is temporary, okay, for 30 days. After 30 days, what happens?
“And then, you know, the other contradiction is that when the subsidy was removed, the government said part of the reason was to save revenue and curb corruption.
“But the same administration has been borrowing on a large scale since then, and people have been asking: If you remove the subsidy to generate more revenue, how are we now in this kind of situation?
“There is still a lot to be said, but the government still needs to take a step further and publish the details of the price modulation plan, including who is going to pay and who is going to bear the cost of all this.
“There are more questions than answers in what has been proposed. But in terms of intention, I’ve said that the government woke up too late to say that it wants to help the people.
“We could have done this much earlier, and other people would not see it as an opportunity to attack the administration.”
